A Job for Every Iraqi

Special Guest Editorial

Steven Shafarman, president of the Citizen Policies Institute, offers a bold idea for the rebuilding of Iraq. Indeed, this approach would be beneficial to the economy of any nation.

by Steven Shafarman

The United States has a duty, we all agree, to help the Iraqi people rebuild as a peaceful, stable, and democratic nation. At the same time, the Bush administration is under enormous pressure to minimize spending for Iraqs reconstruction and to get quick results so U.S. forces can come home.

Everyone knows it will not be easy. After massive looting, weeks of war, and decades of oppression, many Iraqis are hurt, hungry, homeless, jobless. There are ethnic rivalries, distrust of former Baath party officials, self-proclaimed “leaders” competing for turf, and doubts about the role and intentions of U.S. forces. Democratic government requires a vast civic infrastructure: laws, courts, police, schools, banks, postal system, communications media, and more. These institutions must be created and run by Iraqis; even the appearance of being imposed or controlled by the United States is sure to raise problems.

So how do we help the Iraqi people build a new Iraq? The simplest and most cost-effective approach is to hire them to do it. All of them.

For the past few weeks, U.S. officials have been paying $20  about half of the prevailing wage, which is $35 a month  to Iraqi civil service workers who return to work. When that began, retired Lt. Gen. Jay Garner estimated that 1.5 million to 2.5 million people are eligible. But what about the rest?

Iraq has a population of 24 million, although 42 percent are children; just 14 million are adults. So $20 a month for every adult Iraqi would cost less than $3.5 billion a year. Iraqs oil royalties are estimated to be $10 to $15 billion a year; that, plus whatever the United States contributes, means plenty of money for a basic income along with substantial reconstruction.

The concept of a guaranteed basic income is not new. Versions have been proposed in the United States by political and economic leaders as diverse as Richard Nixon, Martin Luther King Jr., George McGovern, Milton Friedman, and Daniel Patrick Moynihan. In South Africa last year, a government commission recommended giving a monthly “basic income grant” of roughly $10 to every person age 7 or older  just enough to ensure that people with no other income can afford to eat, making it possible for them to be productive in school and at work.

Something like that already exists in Alaska. Since the early 1980s, some of the royalties from oil production go into the Alaska Permanent Fund, which invests the money and pays an annual dividend to every resident. (The dividend in 2002 was $1,540.) The fund makes explicit the fact that Alaskas oil belongs not to the government but to the people  just as President Bush, Colin Powell, and other government officials have said Iraqs oil belongs to the Iraqi people.

The basic income would promote local markets for food and shelter, and lessen reliance on national or international relief agencies. And it would ensure that every citizen could afford the time to participate in the hard work of democracy  staying informed, debating issues, choosing candidates, voting, holding office. For every Iraqi, sharing directly in oil royalties would promote a sense of national unity and identity, reducing ethnic tensions and instability.

Even though basic income is universal and unconditional, it is not a socialist idea. It preserves markets and private property; indeed, it would strengthen markets by providing everyone with the means to participate. It would supplement, not replace, income from jobs and other sources, leaving intact the incentives to work, earn, save, and invest.

None of the oil-producing countries in the Middle East is a democracy or a free market. In every one, oil royalties go to some ruling elite and there are serious inequalities, especially involving women. The basic income approach would not only help Iraq become the first oil-producing free market democracy in the region, but also a role model for its neighbors.

The simplicity, cost-effectiveness, and common sense of this approach serve to call the administrations bluff: Did we really mean to liberate Iraq? Did we really mean the countrys oil belongs to its people? Or what was the war really about?

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5 Responses to A Job for Every Iraqi

Iraq Oil Money Invested – Returning an annual equal Dividend to all children and adults in Iraq. A temporary equal monthly pay to the pay packet system already
existing for most adults in Iraq, plus neighborhood child specific business loans (food clothing shelter education)(equal to the number of children in each
neighborhood), to come from direct spending of the Oil Money. This temporary equal monthly payout through the adult pay packet system and child specific
business loans, discontinues as the first real Dividend is distributed to all in 2006.

The oil belongs to these people to invest in education and alternatives to oil, to the benefit of all Iraqis and all people of the world. Direct spending of the oil money
is only justified as a transition to the real Iraq Dividend. Investing protects the people by a generation of wisdom. Investing in their own oil infrastructure and
education, will give them rapidly increasing control of their own future. The annual equal Iraq Dividend to every child and adult in Iraq will bring the people to
protect the oil facilities and the fund itself.

What’s going on here? We have to find jobs for Iraqis, or for that matter anyone else?The only reason why there are no jobs is because the access to one of the three factors of production is held up. Now let me guess.. can’t be people, cause there the ones who are looking, can’t be capital euther ’cause anybody can start off collecting rubbish without other means until he has collected enough to make something usefull (that is to say Capital is self-generating). I know its LAND! So all the great USA military force in Iraq has to do is to free up the land.

But wait a moment, what about the U.S.of A itself. Isnt there an awful lot of unemployment there and lots of unused land too. Seems to me that we had better bring our macro-compassion home before we let it run riot is far away places with strange sounding names. First get it straight – to “create” jobs first allow greater equality of opportunity and with the sweeping away of the monopolies in land that prevent this, there will be generated (not created) jobs for all.

Now here is someone who is actually THINKING of the welfare of Iraquis. May Allah bless him. With all the talk of “democracy” in a non-democratic context, Shafarman’s ideas well deserve a broader hearing.

Bush’s administration obviously has no idea what to do with/in Iraq, now that it has been “conquered”. George II had never even visited Europe, before he became president. He has a hard enough time even pronouncing English. Quite obviously, the reasons for invading Iraq had nothing to do with any concern for the welfare of the people of Iraq. The utopianism expressed by Shafarman, in terms of a post-invasion government, is interesting in that it posits one possible solution within a terrible and chaotic vacuum.

Unfortunately, there don’t seem to be any Shafarmans within the Bush Administration, or even anywhere near it. So our newly liberated Iraquis will just have to make do. The price of yet another “freedom” perhaps. I’ll bet, over the course of 3000 years, Iraquis have seen many a liberation.

My recent thoughts on the matter of guaranteed income have led me to use the
term “level living floor” — which is to be established under the “level
playing field” of the rich. They declare by this term, “level playing
field,” that they are playing– successful businessmen, CEOs often refer to
their activities as playing, whether “boardroom hardball” or some other
competitive game. One described the level of his income as a “scorecard.”

Meanwhile 90% and more of the race do not have the luxury to play. A level
living floor would give them this.

Secondly, a guaranteed income would be threatened by landlords jacking up
rents, etc. This has led me to the idea of a “guaranteed infrastructure”–
this would be a form of level living floor– which would use
state-of-the-art design (no limits on quality and durability, no “built-in
obsolescence” and shoddiness so that capitalists can sell more products).
Kaizen in design and construction– this would shame businesses into
improving their products. Guaranteed infrastructure! Then let the rich play
on their playing field. This would establish democracy on the ground, with
food, clothing and shelter, not high-sounding rhetoric about “freedom.”

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Arts & Letters

Geonomics is …

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.

one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.

a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.

an answer to a rarely asked question. If price is a reward for production, why do we pay for land, never produced by any of us? What is land price a reward for? Good behavior? How much money do we spend on the nature we use? Who gets it? What do they do with it? (If you answer all these correctly, you’re not a genius but a geoist.) The worth of Earth is enough that were we to collect and share it, we could abolish taxes on the goods we do produce. For example, San Francisco’s Redefining Progress has calculated that Cali-fornia could abolish all state and local taxes were it to collect the values of resources and of using na-ture as a dump. By exorcising the profit motive from depletion and pollution, rent collection could replace bossy regulation. Economies could self-regulate, as the rest of the eco-system does. See how big problems yield to big answers when we ask the right questions?

more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.

a new field of study offered in place of economics, as astronomy replaced astrology and chemistry replaced alchemy. Conventional economics, in which GNP can do well while people suffer, is a bit too superstitious for my renaissance upbringing. If I’m to propitiate unseen forces, it won’t be inflation or “the market”; let it be theEgyptian cat goddess. At least then we’d have fewer rats. Meanwhile, believing in reason leads to a new policy, also christened geonomics. That’s the proposal to share (a kind of management, the “nomics” part) the worth of Mother Earth (the “geo” part). If our economies are to work right, people need to see prices that tell the truth. Now taxes and subsidies distort prices, tricking people into squandering the planet. Using land dues and rent dividends instead lets prices be precise, guiding people to get more from less and thereby shrink their workweek. More free time ought to make us happy enough to evolve beyond economics, except when nostalgic for superstition.